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Canada will ban foreign investors from buying homes in the country for two years in an effort to cool off the surging real-estate market and spur construction activity, Bloomberg reported.
Finance Minister Chrystia Freeland outlined a number of steps to curb speculation and cool demand amid record housing prices as she announced the federal budget for the year.
The two-year ban comes as the government also announced higher taxes for people who sell their homes within a year. A part of the budget will also be earmarked to build affordable housing and help local governments update their systems to allow faster construction of new properties.
Even so, the ban on foreign buyers will not apply to students, foreign workers or foreign citizens who are permanent residents of Canada, the Associated Press added.
During last year’s election campaign, Prime Minister Justin Trudeau vowed to ban “blind bidding” for houses, a system by which offers are kept secret when someone is auctioning a home.
Blind bidding has been blamed for skyrocketing real estate prices that have sent home prices soaring more than 50 percent over the past two years.
The ban also comes as Canada has committed $397 million in extra military help to Ukraine, as well as further humanitarian and financial assistance to Kyiv following Russia’s invasion.
Canada also pledged more than $7.2 billion in military spending over the next five years following pressure from the NATO military alliance.
Even so, Canada will fall well short of NATO’s two percent of gross domestic product expenditure threshold, even as other members massively increase their own military commitments in response to Russia’s invasion of Ukraine.